Kuwait cuts some rates to ease currency and coronavirus pressures

Kuwait cuts some rates to ease currency and coronavirus pressures

Kuwait's central bank cut interest rates on some monetary policy instruments in an effort to ease pressure on the currency while helping the economy cope with the impact of the Covid-19 pandemic.

In a surprise move, the central bank also said it would keep the discount rate at 1.5 percent, maintaining the existing cap for loans extended to customers in Kuwaiti dinars.

At the same time, it lowered by 0.125 percent the repo rate and yields on term deposits, direct intervention instruments and public debt instruments across the entire yield curve up to the 10-year term. The change comes into effect from Wednesday.

“Cutting the repo rate should drive further improvement in Kuwaiti banks' cost of funding, which was elevated last year, and support the margin outlook,” said Bloomberg Intelligence analyst Edmond Christou. “Any support